Treasury Prices Lower As Investors Await Bank of Japan News
MARKETSCOPE : Treasury bond prices fell in range-bound trading on Wednesday, as investors waited to hear how the Bank of Japan will move on monetary policy.
The 10-year Treasury note eased 02/32 to 98-05/32 for a yield of 4.73%, while the 30-year bond fell 08/32 to 96-14/32 for a yield of 4.72%.
Japan's rising Consumer Price Index over the past few months has driven speculation that the BoJ will signal an end to quantitative easing, which has kept an upward bias under bond yields globally over the past week. Investors waited for news on Thursday about the Bank of Japan's two day policy meeting that started today.
Meanwhile St. Louis Fed President Poole said "housing activity will stabilize and remain at a high level this year." He thinks the Federal Open Market Committee "will keep underlying underlying inflation low and stable, and that the growth of real household income will recover nicely due to the waning influence of last year's spike in energy prices," wire service reports said.
Chicago Fed President Moskow said U.S. interest rates are currently in a neutral range but more increases may be needed. Moskow said core inflation is contained but has been running close to 2%, "the upper end of the range I feel is consistent with price stability" for most of the past year. "We need to be careful to monitor for the emergence of any economy-wide strains on resource utilization," he said.
News also hit that U.S. consumer credit rose by a less-than-expected $3.94 billion in January as car and boat loans slowed. The Federal Reserve said consumer credit outstanding rose to $2.162 trillion in January, rising at an annual rate of 2.2% from the revised $2.158 trillion in December.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity for the week ended March 3 increased 0.7% to 575.6 from the previous week's 571.5.